Category Archives: Money

Ministers Set Aside £800,000 for Hunting Down Illegal Loan Sharks

UK Ministers have pumped £800,000 into efforts aimed at cracking down on illegal loan sharks out to exploit the most vulnerable borrowers. Rogue lenders capitalising on desperate borrowers are going to face a fresh stringent crackdown. £100,000 of the money set aside was seized from dodgy firms. The £800k will be spent on efforts aimed at encouraging vulnerable borrowers to join credit unions instead of considering high-cost credit options.

A record £5.6 million will be availed to Illegal Money Lending Teams in the UK to fight unscrupulous lenders who target poor and desperate borrowers. The money is meant to help troubled borrowers get out of debt and stay away from lenders offering loans at ridiculously high interest rates.

An estimated 300,000 British households are indebted to illegal lenders. According to Treasury’s Economic Secretary, John Glen, “high-interest lenders are lowlife crooks who take advantage of the most vulnerable. The 300,000 Britons indebted to these illegal lenders must know we are on their side. This is why we are spending more to support the victims and fight the loan sharks.”

The news has been received positively by many including The Sun which already has a campaign pushing for a ceiling on the total cost of high-cost credit offered via rent-to-own products and doorstep loans.

In 2017, 7 million British households used high-cost credit like doorstep loans and rent-to-own products. Ministers have called on an extension of the payday loans cap to many other types of high-cost credit including credit cards.

Stella Creasy has been on record accusing high-cost lenders of “preying” on Britons who survive on insecure incomes. In a recent statement, she pleaded with ministers to borrow from the payday loan cap lessons and apply a similar cap to other loan products stating that Britain is drowning in debt.

The latest statistics indicate that there have been 380 prosecutions against illegal lenders since the IMLT (Illegal Money Lending Teams) was formed in 2004. The IMLT has written off 73 million pounds of illegal debt saving 28,000 poor borrowers from the jaws of loan sharks.

According to Peter Tutton, StepChange Debt Charity’s Head of Policy, the move by the ministers is welcome. In a recent statement, Tutton stated that the crackdown on illegal loan sharks needs to extend to the entire high-cost credit market to ease the harm experienced by many British households forced to take loans to survive. While reacting to the new efforts aimed at boosting the IMLT’s mandate, Tutton stated it is time for the UK government to seek creative and sustainable alternatives to help vulnerable households.

Why is it important to stop loan/credit rip-off

According to The Sun, no borrower should be forced to pay twice as much as they borrowed or more regardless of the type of loan product they are taking. Paying interest that is equal or more than the borrower amount is unethical in any standard.

This thinking is what inspired UK newspaper The Sun to launch a campaign pushing for a cap on the cost of doorstep loans and rent-to-own loans. The Sun is calling for a cap similar to that set on payday loans in 2015 where the total cost of loans can never exceed the loan amount.

Since the payday loan cap came into effect in the UK, the number of payday loan borrowers with unmanageable payday loan debt has decreased by over 50% according to  Citizens Advice which offers free, independent and confidential financial advice to anyone in need.

People earning the lowest incomes and living in the most poverty-stricken places are paying the steepest price for loans. Doorstep and rent-to-own loan lenders target individuals whose income isn’t enough to cover all the basic monthly household expenses. These high-cost loans are extended to individuals who have problems paying for utility bills and rent among other essential bills. The loans are also extended to borrowers who want to buy household goods like furniture.

Although the loans seem helpful, they attract exorbitant interest rates amounting to 1,500% in some cases. It is scandalous for anyone to have to borrow money for subsistence and then be forced to pay three times the loan amount.

With the IMLT funded, there is enough momentum to deal with all high-cost lenders in the UK conclusively.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

The FCA is Preparing For Cryptocurrencies Adoption

Traditional financial institutions in the UK and most countries in the world haven’t been very supportive of cryptocurrencies in the past several years. However, 2018 has seen a widespread “change of heart”. Institutions that were thought to be against cryptocurrency adoption and integration are now softening their stand.

The FCA is one of those institutions that have begun making significant steps towards positive cryptocurrency regulation. In March 2018, The FCA, in conjunction with the Bank of England launched a cryptocurrency taskforce aimed at regulating and fostering the rapidly expanding sector. The regulator also launched a fintech sandbox meant to boost fintech development by attracting tech companies from all over the world.

According to the FCA’s 2018/2019 business plan, [1] the regulator will give a detailed report on cryptocurrencies late 2018. However, the FCA has already released a guideline for financial institutions interested in launching cryptocurrency derivative offerings.

There has been a longstanding apathetic attitude about Bitcoin among other Cryptocurrencies from traditional financial institutions like the BOE (Bank of England).

BOE governor, Mark Carney has been on record condemning Bitcoin in an address he made in February 2018 at Regent University. [2] In his remarks, Carney stated that Bitcoin had failed miserably as a store of value and medium of exchange.

Some renowned economists have also been on record saying it was unlikely that traditional financial institutions would “warm up” to Cryptocurrencies. One such economist is John Van Reenen, Professor of Economics at MIT.

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However, the latest move by the FCA suggests otherwise. There is a strong indication that the regulator is taking steps that will see England become the most attractive destination for Blockchain start-ups and tech companies. [3]

Volatility has been the primary concern about Cryptocurrencies globally. However, these concerns seem to be reduced currently given the interest generated by the sector in the past year. The FCA seems to be following in the footsteps of American exchange operators. The CBOE (Chicago Board Options Exchange) and the CME (Chicago Mercantile Exchange) were the 1st to float Bitcoin Future contracts. The move boosted Bitcoin’s price to peak at $20,000 a week later before a price correction.

This wouldn’t have been possible if the CFTC hadn’t authorised the move to launch cryptocurrency futures options. The CFTC has gone further and promised regulatory guidelines which are expected to boost cryptocurrency ICOs and Blockchain technology.

Cryptocurrency trading options

Similarly, the FCA has acknowledged demand for cryptocurrency derivatives in the UK. [4] The regulator has issued a statement to companies launching cryptocurrency derivatives. Although there is no cryptocurrency regulation in the UK currency, the FCA requires firms interested in offering contracts for differences, future and crypto options to follow the existing FCA regulations.

Blockchain

Since cryptocurrencies appear to be an unstoppable force that still raises suspicion among traditional financial players, it is difficult to predict how the pending cryptocurrency review will unfold. However, the FCA is likely to focus on lucrative Blockchain technology applications.

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Legislators such as Matt Hancock have already been on record predicting an unmatched impact of the technology in the future. In recent remarks, Hancock highlighted how the British government has already set aside 10 million pounds to fund different Blockchain projects on energy and voting systems among other projects.

In his remarks, Hancock stated that the cryptocurrency task force will create an approach that matches the need for growth and innovation while managing the risks presented by the sector.

According to Nigel Green, Founder and C.E.O. of Financial consultancy firm deVere Group, the growth of cryptocurrencies in the recent past can only be expected to soar over the next 10 years as more businesses adopt the main cryptocurrencies into their activities to meet growing customer demands.

Green expects the FCA, being one of the most respected and influential financial regulators globally to be at the forefront of shaping as well as defining cryptocurrency policies for regulators globally. He also expects the FCA to define the thinking behind cryptocurrencies since most leading economies in the world are already paying close attention to the cryptocurrency market.

If the FCA follows the CFTC and SEC move, support for cryptocurrencies in the UK and Europe at large would surge. Positive news from the FCA would give the cryptocurrency market a much-needed boost. The regulator has come a long way from issuing cryptocurrency related warnings to investors to showing signs of adoption.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Asda Shelves Controversial £99 Petrol Deposit

Supermarket chain Asda has shelved its controversial petrol deposit trial rolled out in three supermarkets in the UK. The move followed adverse news headlines in the recent past. Disgruntled customers have been voicing their displeasure for being charged £99 more after filling up using the supermarket’s pay-at-the- pump system. The system had been allowing Asda customers to pay for fuel upfront using their card without going into the kiosk.

According to BBC reports, Asda claims the £99 deposit was meant to be a holding charge to make sure customers have enough funds to pay for fuel. The scheme has now been suspended. Asda claims they just wanted to do what was best for their customers.

What went wrong?

The Asda petrol deposit was designed to help customers avoid overdraft facilities when paying for fuel in case a customer paid for fuel using their card, and they didn’t necessarily have funds available in the card. Although the trial deposit was designed to do good, it has faced widespread criticism from customers who were forced to pay the £99 deposit over and above the fuel purchased without any warning.

The trial deposit which was meant to be cancelled when the right fuel amount was paid faced serious delays because of coordination challenges between Visa, MasterCard and consumer banks. The challenges left many Asda customers short of £99 temporarily.

According to a statement released by Asda, MasterCard and Visa intended to make sure Asda customers had enough funds in their card to pay for fuel and the £99 deposit would be refunded immediately to the customers through their bank.

Asda admitted to receiving few complaints about the process but went ahead to suspend the change sighting risks associated with harming their customer’s trust in them. Until the British retailer is given assurances that all banks will comply with the MasterCard and Visa rule change, it can’t continue with the petrol deposit trial.

High profile complaints

Asda may have received a few complaints, however; most were shared on social media (Facebook) and reported by mainstream media. One notable complaint was by Asda customer Jade Louise who blasted at the company furiously for being charged £99 after buying petrol worth £5 at an Asda located in Dewsbury, West Yorkshire. According to her complaint, her trial deposit was refunded three days later causing here huge inconveniences. Her complaint, which was in the form of a Facebook post, was shared more than 20,000 times. She attached her bank statement (a screenshot) to back up her claims and a post urging people not to fuel at Asda unless they are willing to wait for days without £99.

Part of her complaint blamed Asda for bringing a new system that allows the retailer to deduct £99 from a customer’s account for fuel as well as a second deduction for the fuel you have actually taken. According to Louise, she had tried contacting Asda and received unsatisfactory feedback from a manager who stated that the deduction was a trial. Louise among many other complainants expressed displeasure at the fact that £99 is deducted from your account and you can’t use the money for days until it is released back after the other payment is cleared. Most complaints were on execution.

Customers felt Asda could have communicated better using notices on petrol pumps to ensure customers were aware of the change in policy before facing a huge £99 pre-authorisation charge which wasn’t refunded in minutes.

Change in the rules

According to MasterCard correspondence with BBC, there had been a recent change in industry regulations in 2017 that required automated fuel pumps to pre- authorise a value matching the cost of a full tank of petrol. Before the change, motorists were only charged a £1 pre-authorisation from their accounts as a

confirmation that they were using a valid card. The new rules were meant to ensure customer didn’t fill up more fuel than they could afford which would usually result in overdraft charges.

The controversial £99 petrol deposit trial comes in the wake of an anticipated increase in fuel prices globally as the United States decided to withdraw from the Iran nuclear deal. There is a looming increase in pump prices in the next few weeks.

There is also increasing concern about short term debt like overdraft loans in the UK.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Provident Financial Breaks Gloom, Reports Strong Start to 2018

According to a trading update by Provident Financial, all the lender’s businesses are performing well. The update has put an end to the doorstep lender’s recent problems. The Bradford-based lender offers high-cost loans to some of the most vulnerable families in Britain. Reports of a strong start have put an end to recent financial woes.

According to the trading update, all three businesses of the group have started 2018 on a positive note. This announcement comes after Provident Financial tapped £300 million of fresh investment funding. The lender had failed to reorganise its debt collection business and announced two profit warnings in the recent past. Provident Financial had also had a challenging year for shareholders before making the positive announcement.

In August 2017, the then C.E.O. Peter Crook resigned after the lender announced a 2nd profit warning in a span of two months. The second profit warning was triggered by a decision to overhaul home-collection business by hiring 2,500 customer experience managers to replace self-employed debt collectors. In the wake of the news, there was a massive exit of self-employed agents that happened faster than Provident Financial had envisioned resulting in poor debt collection rates.

The lender also faced a massive fine of £2m and compensation amounting to £169 million in February 2018 paid to its Vanquish Bank Unit consumers after the FCA found the lender guilty of malpractice. The regulator discovered that Provident hadn’t informed its customers accordingly about the total cost of add-on product, Repayment Option Plan.

The FCA is also investigating Provident’s car finance business Moneybarn. The regulator is concerned on how the lender has been evaluating potential car buyers before issuing loans. Although Provident Financial’s debt collection business is still making losses, the business is set to become profitable in 2019.

The trading update also covered the level of debt collection after Christmas which happens to be the busiest and most profitable period for high-cost lenders. Provident Financial debt collection arm enjoyed considerable business during this period adding that Vanquis Bank had been delivering profits beyond

expectations and although Moneybarn business was affected by bad debts, the performance was modestly beyond expectations with customer numbers higher by 24% compared to the same period last year.

The improvement was experienced despite the lender tightening the criteria for choosing suitable borrowers. In remarks made to mark an end to the first quarter, Provident Financial C.E.O. Malcolm Le May stated that the financial and operational performance of Provident Financial is promising and the lender is on track to post 2018 results that match internal plans.

About Provident Financial: Brief overview

Provident Financial is a sub-prime lender or “doorstep lender” in the UK. The company specialises in home collected credit, online loans, credit cards and consumer car finance. The company is listed on the LSE.

Provident Financial conducts business under different brands. Vanquis does credit card business. Provident Personal Credit is a home credit operations company while Satsuma offers online instalment loans. Other brands include Moneybarn for car finance business and Glo for guarantor loans. Provident Financial’s home credit brand Provident Personal Credit lends to individuals in their homes via local agents. The company serves over a million home credit customers.

Provident Financial was established in 1880 to offer cheap credit to residents of West Yorkshire. The lender was listed on the LSE in 1962. The company formed Vanquis Bank in 2002 to issue/operate credit cards. Vanquis focuses on pre-paid credit card business. In 2013, Provident Financial started its online short-term loan business Satsuma Loans before acquiring Moneybarn a year later. The Moneybarn acquisition was meant to give the lender exposure to automobile finance business.

Provident Financial has had a fair share of challenges ranging from fines to reprimands for questionable lending practices to breaching regulatory requirements. The lender’s stock has dropped by over 60% in a single day (22nd August 2017) after issuing a 2nd profit warning, events which saw the resignation of the then C.E.O., cancelation of shareholder dividend, a warning alluding to the cancellation of the full-year dividend in 2017 and announcement of an ongoing investigation by the FCA.

The latest trading update signalling the end of the lender’s financial woes is a “breath of fresh air”. If Provident Financial manages to maintain the current momentum, the lender may be able to reclaim long-lost glory.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

The National Living Wage Has Had a Boost in 2018

The UK National Living Wage was officially increased as of April 1st, 2018. The increase has seen many UK workers earn a long-awaited pay boost. The increase was confirmed in the November budget by Philip Hammond. The boost is however reserved for UK workers aged 25 years and above. It is also below the current Real Living Wage, a wage that is independently calculated by the Living Wage Foundation, a voluntary scheme with thousands of employers involved (such as local authorities, retailers, and charities).

Definition: National Living Wage

The UK National Living Wage (formally referred to as National Minimum wage before 2016) refers to the amount of money any UK employee aged 25 years and above is legally entitled to earn. The wage has increased to £7.83 (from £7.50). The £0.33 per-hour increase was officially introduced on 1st April 2018.

The United Kingdom introduced a compulsory national living wage back in 2016. The Labour government set the first ever National Minimum Wage in 1998. Before that, there was no official wage rate in existence although trade unions in the UK have always fought hard for the rights of their workers.

Mr. Hammond wants to raise the National Living Wage consistently to £9 in the next two years (by 2020). The news has been welcomed by many UK workers although only workers with employers who are Real Living Wage scheme members stand to enjoy.

Definition: National minimum wage

The UK National Minimum Wage refers to the amount of money workers aged between school-leaving age and 24 years are entitled to. The amount can vary depending on factors such as age and whether a worker is a member of an apprenticeship scheme.

As of April 1, 2018, workers aged 21 to 24 years will earn a minimum of £7.38, up from £7.05. Workers aged 18 to 20 years will earn a minimum of £5.90, up from £5.60. Workers aged less than 18 years will earn £4.20, up from £4.05.

Apprentices who were entitled to £3.50 (if they are less than 19 years old) are now entitled to £3.70 as of 1st April 2018.

Binding limits

The proposed national wage limits are binding. Any UK worker who hasn’t been getting wages matching the new national limits has the right to complain to their employer immediately. If the employer fails to address the concern, the worker can escalate the complaint to the HMRC for further investigation and action.

Who doesn’t qualify for the National Living Wage or National Minimum Wage?

The new National Living Wage and National Minimum Wage limits aren’t applicable to voluntary workers, self-employed individuals, company directors as well as family members living in an employer’s home or those who do household chores.

Discrepancies by location and industry

It’s also important to note that the pay is the same regardless of location. The pay is the same for workers living everywhere including London. There are however differences in pay for workers in horticulture and agriculture.

Entitlement

All UK workers who were employed before 1st October 2013 are entitled to the wage set in their employment contracts. Entitlement to the National Minimum Wage or National Living Wage depends on a worker’s age as well as their membership to an apprenticeship scheme.

Definition: Real Living Wage

The Real Living Wage is a wage independently calculated yearly by Charity organisation, Living Wage Foundation. The wage aims to acknowledge the “real” or “actual” cost of living based on factors like fluctuating prices of groceries in the UK. The scheme has 3000 employers as members. The wage limit is set by Living Wage Foundation. Accredited employers include; construction companies, retailers, banks, NHS trusts, local authorities, and charities.

According to Living Wage Foundation, the Real Living Wage is £8.75 per hour everywhere except London. London’s Real Living Wage is £10.20 currently. The Real Living Wage is calculated yearly (every November). All accredited employers must commit to any increases. The rate applies to workers over 18 years of age in recognition that such workers have to face similar living expenses like everyone else.

Although companies aren’t legally entitled to pay their workers in line with national living or minimum wages, companies which are members of the Real Living Wage scheme automatically pledge to pay their workers as per the current Real Living Wage rates at any given time.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

PPI Warning Issued Over Adverts

According to MoneySavingExpert.com founder, Martin Lewis, payment protection insurance (PPI) claimants shouldn’t follow advice on the FCA’s new PPI adverts or risk losing up to 33% of their payout.

The regulator is telling people to search for “FCA PPI” via its new ads encouraging people to check if they have been mis-sold PPI before. However, MoneySavingExpert.com has discovered instances where other firms have charged claimants up to 36% for claiming PPI simply because those firms appear as top results for this search term instead of the official FCA website.

Advising claimants to use a search term (FCA PPI) instead of giving the official FCA website is risky since the regulator isn’t guaranteed a top result

for every search that happens using the “FCA PPI” search term. Although the FCA comes top for organic search results relevant to search terms related to it, paid ads “sit” above the search terms and these ads are what people see first.

The problem

The FCA launched a series of Arnold Schwarzenegger adverts urging people to check if they have been mis-sold PPI before. Those who suspect they have been mis-sold PPI covers in the past must claim before 29th August 2019. The ad campaign includes two different radio adverts, a TV advert, and two different poster adverts. The TV ad happens to be the only ad that features the full FCA site address. The poster and radio ads urge people to search for the term “FCA PPI” and don’t offer the official FCA website.

When the “FCA PPI” search term is tested on Google among other search engines, MoneySavingExpert.com discovered that there are multiple instances where paid-for companies rank higher than the official FCA site in search engine results. In some instances, the regulator appears 4th in a list of ads and firms ranking

above are entitled to a cut (up to 36%) on every successful claim.

According to Martin Lewis, the FCA must change the call-to-action for these ads because they are misleading. Lewis acknowledges the FCA’s efforts to try and educate the public but goes further to state that the regulator will not reach the intended people with the ads in their current state. According to Lewis, the regulator is targeting individuals who haven’t reclaimed PPI in the past ten years. A majority of such people are not web savvy. They are also vulnerable. Lewis argues that most people won’t be able to differentiate the ad with the official FCA website from those from claim companies which are entitled to take huge “cuts” from every successful claim they process.

In the recent past, Google has made it harder to differentiate between search results and ads on search engine pages. For those who aren’t web savvy, spotting the difference is hard which could lead to mistakes. In his humble opinion, Lewis cautions that the regulator is using public funds to pay search engine giant, Google, to rank higher yet most claim firms have bigger ad budgets having made a lot of money taking a third of people’s payment protection insurance payouts. In simple terms, these firms have the incentives to use a lot of money to dominate Google’s ad ranking for PPI and related terms. This, in turn, makes it easy for the FCA’s ad campaign to be “hijacked.” Clicks meant for the FCA are likely to go to claims management sites. What’s more; people may find themselves paying over 30% to reclaim what could have been reclaimed for free. Furthermore, the chances of a claimant taking action after seeing the cost are very slim.

Why it’s happening

The problem is simple. The regulator chose a search term over the official FCA website to control what a person sees when they search the term “FCA PPI”. This is despite the fact that search engines display paid-for ads as the highest ranking results today. Companies can bid on terms used by people to try and secure top search engine result spots for those terms.

Reclaiming PPI insurance

PPI is a special type of insurance policy sold to individuals who get loans. As the name suggests, payment protection insurance is meant to cover a borrower’s

loan repayments in case of eventualities like sickness, accidents, unemployment, etc. that may hinder their ability to make repayments. PPI is a good insurance cove; however, it has been mis-sold widely. Just recently, a ruling (known as Plevin) has made it possible for people to claim some money back on mis-sold PPI covers in the past. The landmark ruling was inspired by the fact that many people have been paying for potentially worthless PPI cover for years. MoneySavingExpert.com has a mis-selling checklist[1]. You don’t need to pay anyone/any company to reclaim mis-sold PPI.

Act NOW!

You must check and launch your claim before 29th August 2019 if you meet the mis-sold PPI guidelines. Complaints received before the deadline will be processed accordingly. However, some people may be able to claim after the deadline i.e., those who bought PPI policies after 29th August 2017. The deadline may also not be applicable for individuals disputing rejected PPI policy claims.

It is estimated that approximately 5.5 million people were victims of mis-sold PPI between years 2013 and 2015. Majority of these people haven’t launched claims.

The FCA’s take

According to an FCA spokesperson, auctions for PPI related keywords are extremely competitive, and the regulator can’t guarantee its ads will enjoy a 1st place position every time. The regulator is, however, monitoring this development carefully and working on an approach focused on increasing the value of its ads. Nevertheless, the regulator is confident about the campaign’s call-to-action given website traffic has increased significantly since the campaign launched.

Quick Guide to Debt Management Plans (DMPs)

What is a Debt Management Plan (DMP)?

A debt management plan or DMP is simply; a plan or program meant to help you repay your debts comfortably. DMPs are recommendable for people with non- priority debts such as store card debt, credit card debt, overdrafts or personal loans. Debt management plans are usually prepared by debt management companies. Your DMP provider will work with you and your creditors to come up with the most affordable debt repayment schedule for you that is agreeable to your creditors. A typical DMP will involve a borrower making one payment monthly to their DMP provider who in turn, pays creditors as per the agreed plan. Typical DMPs run for 3 to 5 years. They are part of debt consolidation plans designed to help individuals in debt regain control of their debt/finances while decreasing unsecured debt.

Types of debt that can be paid off using a debt management plan

Debt management plans are ideal for non-priority debt which includes; personal loans, overdrafts, building society loans, bank loans, money borrowed from family/friends, payday loans, credit card loans, store card debt, home credit, and catalogue or in-store credit debt.

Examples of debt that CAN’T be repaid of using a DMP include; council tax, court fines, utility bills (electricity and gas bills), child support, TV license, high purchase agreements, National insurance, income tax, VAT, rent, mortgage and any other loans secured using your home. Basically, all kinds of priority debt can’t be settled with a DMP.

Getting a debt management plan

Getting a DMP is easy. Many debt advice organisations in the UK offering free advice can help you get a debt management plan. Free debt advisers offer expert debt advice to many people in the UK every year. They are among the best-suited organisations to go to for advice when you find yourself in financial problems.

Before you choose a specific debt management provider in the UK, it is worth noting that all reputable providers have FCA authorisation. You can check for authorisation on the official FCA Financial services register. [1] This is particularly important when dealing with fee-paying providers.

Once you have identified a suitable provider, the next step is agreeing on a suitable monthly budget. This step is important for determining the amount of money you can afford repaying comfortably. After setting a budget, your provider will go ahead and negotiate with your creditors on new repayment terms. A good provider will be able to secure a good DMP that is agreeable to all parties. Most creditors don’t have a problem with people who owe them money as long as you show gestures of goodwill.

Important considerations

A debt management plan will help you take charge of your finances again. However, it doesn’t guarantee you “peace of mind”. Some creditors may still contact you. Also, as mentioned above, DMPs are available for non-priority debt only. It’s also worth noting that DMPs may affect your credit history.

What’s more; creditors are not obligated to accept DMPs. Creditors may also continue adding charges and interest which can increase the total debt repayment amount. A good provider should be able to negotiate great terms that offer safeguards against such practices. Lastly, it’s good to recognise the fact that DMPs may extend the amount of time it takes to repay your debts. Debt repayment methods such as contractual payments are faster.

Main advantages of DMPs

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Although DMPs attract some cons, they have notable advantages. One, you get debt consolidation without taking on additional loans. A DMP will also make you more organised with your finances. You could also improve your credit score and credit report over time. Last but not least, you stand to enjoy some reprieve from creditors or debt collectors because they have an incentive to stop pursuing you.

Why do you need a DMP?

You can choose to repay your debt on your own; however, this isn’t a good idea if you are in debt in the first place. Instead, you should focus on finding professional help externally. People who let debt overwhelm them before they can seek help face serious financial problems. For instance, no one may be willing to lend you by the time you decide to seek help. Your finances may also spiral out of control. Furthermore, taking long to seek help extends the amount of time you need to become debt-free. You can also get free debt advice in the UK!

Reference

[1] https://register.fca.org.uk/

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Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

4-Must Have Insurance Policies For Your Family Besides Health/Medical Insurance

The main aim of insurance is to protect you against risks. There are insurance covers that can protect you from just about any risk you can imagine today. But given the nature of risks, i.e. there are too many risks, it is impossible to cover yourself against all of them. This leads us to a very interesting question; which risks should you consider first?

Eventualities like sickness can unsettle your finances. Many people take emergency loans to cover unexpected medical bills. Short term loans like payday loans can cover a small medical bill. What happens when you or a family member has to undergo an expensive medical procedure? We’ve gone through the trouble of selecting the most important insurance policies below.

Here are the 4-must have insurance policies for your family besides health/medical insurance.

1. Life insurance

Every family should have life insurance coverage for both parents/spouses. Life insurance is crucial for ensuring the family doesn’t suffer financially in case a breadwinner dies. Life insurance is crucial because it covers for funeral expenses, which can be very high. Life insurance also replaces the income of a spouse or parent for a long period allowing the family to go on with life as usual. You should have coverage amounting to at least a year’s salary. If you earn £50,000 for instance, you should have a £500,000 policy or more. The same applies for your spouse/partner. If your partner or spouse doesn’t work and you have children, it is still important to cover them because of their contribution to childcare among other chores which can take a huge portion of the family budget when they are gone. It is also a good idea to cover children as well if their demise will have a significant effect on the family’s finances. There are many types of life insurance covers for families in the UK covering all kinds of risks/expenses. Take your time an pick a cover that works well for your family.

2. Disability insurance

This is another essential insurance policy for your family. Life insurance coverage should come first due to the devastating nature of eventualities like death. Disability is equally devastating. Even though a parent/partner may still be there, disability can render one jobless as well as drain the family’s budget in regards to healthcare costs. Disability insurance policies protect from loss of income among other related expenses arising. This type of cover may be more important than life insurance to some people since it can render a person jobless for life and introduce costly expenditures till death. Some people overlook disability covers because of the mere fact that they are healthy and disability looks farfetched. The most important thing to note is anyone can become disabled in an instance i.e. in case of a car accident.

3. Homeowners insurance

A home is a priceless family possession. As a parent, you don’t want your family to be rendered homeless by any eventuality whether it is natural and manmade. A fire can destroy your home. Your home can also be destroyed by harsh weather, an earthquake, etc. Homeowners insurance covers the cost of replacing the structure as well as contents. Homeowner covers can also cater for the cost of buying a new home in case your current one is destroyed completely. Other related costs included in homeowner covers include the cost of living elsewhere while your home is being repaired. It is important to have coverage for such costs since they are significant and can easily plunge your family into financial problems. Although the chances of your home being destroyed are very slim, this eventuality can force you to take loans and living in distress. A homeowner’s cover allows you to live in peace knowing you won’t lose your home in case of anything. There are many types of homeowner’s covers available today that cover anything you can think of including the cost of upgrades, special features and injuries that may occur on your property. Consider getting such a cover. If you are renting, you should take renters insurance instead.

4. Identity theft insurance

In this current era where everything revolves around technology and the internet, it is important to protect yourself against identity theft. This kind of coverage may seem unnecessary but take some time and think of the consequences of identity theft. If you take payday loans, use credit cards or have a genuine online presence of any sort, you are at risk. Someone can steal your identity online and use your name to orchestrate crimes. You need money to protect yourself against losses arising from such eventualities. An identity theft policy can also cover legal fees involved when restoring your name. We are all at risk of identity theft today provided we use computers, Smartphones and online products/services. Payday loan giant Wonga suffered a significant customer data breach in April 2017. The incident saw the personal details of 270,000+ customers stolen including bank account details. Any victim with identity theft insurance would have been covered in such an instance. Get the above insurance covers first before considering any others. Motor insurance is equally important although it is mandatory in the UK and most, if not all countries in the world.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.